TaxTMI 
TaxTMI 
2018 (11) TMI 1427
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.... proper basis which is unjustified. 2. On the facts and in the circumstances of the case, the A.O. and CIT(A) erred in making trading addition of Rs. 3,00,000/- which was further reduced only at Rs. 1,50,000 by the ld. CIT(A) without any basis, which liable to be quashed in entirely." 2. Ground No. 1 of the appeal is regarding rejection of books of account U/s 145(3) of the Income Tax Act, 1961 (in short the Act). 3. We have heard the ld AR of the assessee as well as ld. DR and considered the relevant material on record. The Assessing Officer has rejected the books of account of the assessee on the ground that the inventory of opening stock and closing stock and its value are not verifiable due to the reason that the assessee filed th....
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....d DR and considered the relevant material on record. The ld. CIT(A) has considered this issue in para 5.3 as under: "5.3 I have carefully considered the material before me. I find that the Assessing officer made the addition of Rs. 3,00,000/-. The A/R submitted that the trading result of the assessee for the year and immediately preceding year are as under: - Sales GP GP Ratio AY 2013-14 1,34,80,953.25 24,91,060.33 18.47% AY 2012-13 21,10,506.18 4,11,756.76 19.50% The G.P rate is slightly decreased but the fall is very much justified from the multifold increase turnover. Your honour, even the books are rejected than it is the established law that the estimation of profit should be made from fair estimation ....
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..... 1,50,000/- is deleted. This ground is partly allowed." Thus, it is clear that the ld. CIT(A) has accepted the fact that for the year under consideration, the turnover of the assessee has increased for more than six times whereas there is only insignificant decrease in the G.P. ratio declared by the assessee for the year under consideration. From the comparative details as reproduced by the ld. CIT(A) in the finding reproduced (supra), it is clear that there is no significant decline in the G.P. ratio which is less than 1% whereas the turnover of the assessee has increased six times during the year under consideration in comparison to the earlier years. Hence, it is settled proposition of law that even if the books of account are rejecte....